The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Detroit Bankruptcy Deal
– Anything But ‘Benevolent’

Feb 3, 2014

City of Detroit Emergency Manager Kevyn Orr delivered the basics of his plan to reduce the city’s debt. No matter what he says, it’s an attack on city workers.

The plan includes a deal for private foundations, the state of Michigan and the Detroit Institute of Arts to contribute 820 million dollars into city worker pension funds.

The suburbs would also pay 1.88 billion dollars for Detroit to turn over its water department, which currently provides water to much of the Detroit area, to a regional authority.

Orr and the media make the pretense that the state, suburbs and private foundations are doing this out of benevolence to the city. They portray the deal as being even-handed, or even favoring city workers, because city worker pensions would be paid 25 cents on the dollar owed them, while bondholders would get only 22 cents.

In fact, nothing could be further from the truth. The deal actually amounts to stealing from city retirees to pay off bondholders, many of them the same banks the city is now suing over crooked loan deals. Emergency Manager Orr, Michigan Governor Rick Snyder, and the wealthy of the region are using the deal to reshape the city to suit their own goals.

The spinoff of the DIA and water department will mean higher admission prices to the museum and increases in water rates, especially for residents of Detroit.

Under the guise of benevolence, they want other workers to support huge cuts in city worker pensions. Other workers shouldn’t buy what they’re selling. An attack on the city workers is an attack on all workers.